Budget may give fiscal sops for agri food supply chain infra

New Delhi,Jan 14 (PTI) Faced with repeated bouts offood inflation, the Finance Ministry is likely to give fiscalsops in the forthcoming Budget, to investment in all segmentsof the cold storage chain for fruit and other agri products.

As directed by the Prime Minister''s Office, theDepartment of Industrial Policy and Promotion along with theDepartment of Food and Public Distribution, Ministry of FoodProcessing, have begun work on preparing the proposals forconsideration of the Finance Ministry, sources said.

"Investment will be encouraged in supply chains,including provisions for cold storages, which will bedovetailed with organised retail chains for quicker and moreefficient distribution of farm products and minimisingwastage," the PMO had said yesterday.

While foreign direct investment is not allowed in themulti-brand retail, the organised retail stores promoted bythe domestic industrial houses have been steadily growing.

However, the missing link has been the back-end supplychain from the farm gate to the consumer.

The proposals under consideration of the governmentinclude 100 per cent depreciation on all investments inphysical cold storage assets by the private sector inagriculture and the entire agri-value chain and tax holiday inrespect of the profits for 5- 10 years.

As big investment is required in building the supplychain, the industry has been seeking fiscal sops for promotingthe organised retail which accounts for less than per cent ofthe total domestic retail estimated at about USD 450 billion.

It wants tax sops across different segments of theback-end infrastructure.

"Cold chain infrastructure is not confined to coldstorages , but extends to temperature handling across thevalue chain from farms to consumers," FICCI Secretary GeneralAmit Mitra said.

The cold chain includes farm level pre-coolers, smallcapacity chill cold storage refrigerated trucks, foodprocessing plants, refrigerated display cabinets for retailshops and deep freezers.

The measures announced by the PMO to fight foodinflation included support to augment storage capacity ofcereals and modernising godowns and other infrastructure.

It is for the second time within a year that prices ofedible items have shot up. The food inflation,fuelled by highprices of vegetables, milk, meat and eggs, has climbed up,close to 17 per cent at the wholesale level.

The UPA coalition government has come under a severeattack from the Opposition parties for not being able to reinin food prices.